Figuring out precisely what effect Maryland's alcohol sales tax increase has had on the market is more complicated than it would appear.

Liquor sales in Maryland are essentially stagnant, with a miniscule 0.2 percent increase since 2011, according to David Ozgo, chief economist for the Distilled Spirits Council of the United States. That rate is, Ozgo said, below the national average.

Since Maryland's sales tax on alcohol increased in July 2011 from 6 percent to 9 percent, there is understandably a good deal of discussion about why growth seems to have stagnated afterward.

The industry, which obviously did not support the tax increase in the first place, blames that so-called "dime a drink" tax hike for the stagnant growth, saying the Marylanders are turning to Delaware to purchase cheaper booze. That allegation is supported by Delaware's 8.8 percent alcohol sales increase during the same period.

However, Vincent DeMarco, who is president of the Maryland Healthcare for All Coalition and strong advocate for the increase, sees it differently.

According to DeMarco, the goal of the increase was twofold: First, it was intended to raise additional revenue for health care and second, it was meant to decrease underage drinking and alcohol abuse. DeMarco sees the stagnant growth as a sign that the bill has accomplished precisely what it set out to do by creating a drop in overall teen alcohol use.

But the reality is a lot more complicated than those simple statements appear.

For one thing, sales tax-free Delaware has always had an advantage over Maryland. Sussex County may have picked up a smattering of new Maryland alcohol customers, but it seems more likely that primarily large-volume purchasers would turn to Delaware; depending on distance, a trip north across the state line is only worthwhile if the savings are substantial.

Simply looking at the number of Maryland license plates in a Delaware dispensary or package store parking lot can be misleading, unless the individual doing the looking has a record or reliable memory of how many such tags were there before the tax increase took effect.

And while some areas - on the Lower Shore, most notably Somerset County - have seen substantial decreases in alcohol sales, overall alcohol sales in Maryland did not decrease at all; they grew by 0.2 percent. While that's a tiny increase, it also is definitely not a decrease.

For the most part, it appears that people who would have been buying alcohol in Delaware continue to do so and a few others are making the trek, but most folks don't change their habits that easily. And most people don't purchase enough alcoholic beverages to make a half hour or more trip out of the way to save a couple of dollars worth their while.

Oh, and let's not forget that it's just possible that some of the decreased growth could actually be attributable to a decrease in underage alcohol use. It would be interesting to see the facts and figures on that issue.

While each side is claiming the sometimes dubious right to declare "I told you so," perhaps in this case, maintaining the status quo is a good thing.

If alcohol sales are holding steady and, in facrt, fewer underage drinkers are indulging their illicit vice, that kind of sounds like an overall win for the state.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Email this article

Opinion: 'Dime a drink' impact is complex

Liquor sales in Maryland are essentially stagnant, with a miniscule 0.2 percent increase since 2011, according to David Ozgo, chief economist for the Distilled Spirits Council of the United States.